Devon Energy (DVN) is upgraded to Buy from Hold with a $70 price target at Argus, citing DVN's planned acquisition of Eagle Ford acreage from GeoSouthern Energy which will accelerate the shift in the production mix toward higher-margin oil production and away from lower-margin natural gas.

The firm also views the Crosstex merger as a positive development that will unlock shareholder value and provide DVN with capital that may be invested in upstream assets.

Shares appear attractively valued at 14.1x the firm's 2013 EPS estimate and at 10.8x its 2014 EPS estimate, vs. a five-year historical average of 10.7x-13x.

Canaccord says oil currently accounts for 12% of DVN's total volume, and the deal likely significantly increases DVN's oil production, as GeoSouthern is the fourth largest oil producer in the Eagle Ford.

"The deal makes them more of an oil company and grows their production," says a Hodges Capital analyst. "A lot of people still have the idea that they are too much of a gas company and this deal will change that right away."

The investor reaction to the deal was tempered by the high price paid, which Richard Zeits says sets a new record in the Eagle Ford play in terms of price paid per net undeveloped acre in a major transaction; the major beneficiary today was Penn Virginia (PVA), whose shares surged 4% thanks to its strong presence in the area.

The acquired assets include current production of 53K boe/day and 82K net acres with at least 1,200 undrilled locations.

Estimated recoverable resource is 400M boe, mostly proved reserves, with the acreage position located in the best part of the play, as evidenced by the highest average initial production rates in the entire play and average estimated ultimate recoveries in DeWitt County exceeding 800K boe/well.

DVN says the acquisition will be funded with a combination of cash on hand and borrowings.

Crosstex Energy LP (XTEX+4.2%) is upgraded to Outperform from Sector Perform with a $29 target price at RBC, which says the combination with Devon Midstream should result in a lower-risk investment-grade MLP, with attractive sponsor support offering increasing organic and dropdown growth options.

Within this context, the firm thinks the 5.6% yield and above-average distribution growth outlook screens attractively vs. other investment-grade MLPs; execution on new projects is a key risk, but management has proven itself through a diverse project slate this year.

An interesting statistic cited by Willoughby: DVN "has risen to $60, but [is] down 15% from five years ago. Rival companies are up an average of 72% over that time."

"The market values its 3B or so barrels of proven reserves at $8.50/barrel, the cheapest level of any independent producer and less than half of the $20-$25 figure in recent deals," Barron's continues, citing an analyst at Milwaukee-based Fiduciary Management. The same analyst values the stock at around $81.

Crosstex Energy LP (XTEX-0.8%) and Crosstex Energy (XTXI-1%) say they have completed construction of Phase I of the Cajun-Sibon natural gas liquids expansion project, which connects their Eunice fractionator in southern Louisiana to Mt. Belvieu supply pipelines in east Texas.

The pipeline is now delivering 25K-30K bbl/day into various Louisiana delivery points and is expected to be moving its full volume of ~70K bbl/day by the end of 2013.

The partnership expects combined contribution of both phases of the Cajun-Sibon expansion project of $115M-$130M of annual run-rate adjusted EBITDA when completed, which is expected in H2 2014.

Oil production rose 16% Y/Y to average 165K bbl/day; the most significant growth came from U.S. operations, where production jumped 38%, highlighted by growth from Permian Basin and Mississippian-Woodford Trend projects.

Devon Energy's (DVN-0.4%) price target is raised to $86 from $77 at Canaccord, which believes DVN's merger of its midstream operation with Crosstex Energy generates many positives.

The merger increases the scale and scope of DVN's midstream business, fosters added growth opportunities and enhances the new entity's finances, which should keep DVN's midstream valuation robust, the firm says; it also highlights how undervalued its E&P business is, something the firm thinks can change for a variety of reasons.

Halliburton (HAL+2.1%) bounces back following modestly disappointing Q3 results, and Jefferies reiterates its Buy rating on HAL shares and raises its price target to $60 from $58 while lowering its EPS estimates for Q4 2013, FY 2013 and FY 2014.

Management’s "less content-rich conversation" in its Q3 report leaves the stock waiting for the November analyst day, when Jefferies expects clarity on efficiency initiatives and growth paths; the firm continues to see HAL as a top pick based on multi-year prospects related to U.S. shale efficiency.

Jefferies also raises its price target on Devon Energy (DVN+2%), to $74 from $71, noting that the combination of DVN's midstream assets with Crosstex adds ~$3/share to its NAV estimate, and future drop-downs could provide additional upside.